Laneco Parent Oks Takeover By Super Valu

July 01, 1992|The New York Times

After a tense day of reviewing a new bid, Wetterau Inc. agreed yesterday to accept a lower takeover offer from Super Valu Inc.

In Super Valu's revised offer to buy the smaller grocery wholesaler, Super Valu will pay $30.25 a share in cash, or $644 million for Wetterau. Super Valu dropped its offer to distribute to Wetterau shareholders new shares in a spinoff of Wetterau's Shop 'n Save retail subsidiary.

One analyst calculated that the revised offer was worth about $2 less per share to Wetterau shareholders than the original offer.

Still, analysts agreed that the revised deal, announced after the close of stock trading, was better than no deal for Wetterau shareholders.

Wetterau's stock plunged earlier in the day when the company announced that it was unable to come to terms with Super Valu and it looked as if the deal was in jeoporday. After an afternoon meeting, Wetterau's board agreed to accept the new offer.

"They are still going to come out pretty well," said Jack Russo, an analyst with A.G. Edwards in St. Louis.

While dropping plans to distribute the Shop 'n Save shares, Super Valu increased its cash bid by a nickel a share, to $30.25 a share.

Super Valu originally agreed to acquire Wetterau on June 9.

Super Valu declined to say what it discovered in reviewing Wetterau's operations that made it decide to revise its offer. "Obviously they saw something they didn't like," Russo said.

The two companies announced they came to terms after the stock market had closed for the day, giving Wetterau investors no chance to react to the news that the deal was salvaged.

Wetterau's shares closed down $4.625, to $26, in over-the-counter trading. But Russo said that once the market has a chance to react to the new deal the shares should climb to $28 or $29.50 today.

Super Valu shares closed unchanged at $24 in trading on the New York Stock Exchange.